How To Begin Investing In Stocks
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How to Begin Investing In Stocks

Hi everyone!

Welcome to Phase # 6 of Keys Value Investing!

In the past few lessons, I have shared the keys of value investing, calculations, criteria, strategies and the list goes on. In this session of sharing,We are going to walk through the process of getting started investing in stock market. Before you begin your very first trading, what would come to your mind?

Besides investing skills? How about the minimum amount to invest in stocks? Do you know how to choose a stock broker? Have you done any online trading platforms reviews before? What sort of commission of stock brokers? How to minimize trading expenses?

How to Begin Investing In Stocks

Let's take a look at what are the options we have?

In the market, there are:-

  1. Online trading
  2. Offline trading

For any online account, an investor may trade in stock by themselves with the aids of online-trading, whereby in offline account, only broker can trade in stock according to the instructions given by clients, therefore an individual is highly dependent on brokers for execution of any orders. So, choose your stock broker wisely.

Online Investing - Starter Kits

Before anyone started to invest, we must first register for an investing account (or trading account). As the online technolgy evolved, The investment opportunities previously available only to high net worth individuals and professional money managers are now at our fingertips - Online Trading Platform.

An online trading brokerage company required verification such as utility bill, identification (driving license or identification card) before proceed to fund transfer.

Clients are normally given a few options for fund transfer such as wired transfer, electronic transfer, external account transfer, stock certificate deposit and cheque deposit.

The requirements for online investing

There basic requirements for online investing, is to register ourselves in trading platform (either online or offline account) that suits you the most. There are various trading platforms found online, the most common platform is designed for short term & frequent traders, some are providing advantages for long term low-trading-frequency investors, and some are in-between the above two. Spend some time and make your decision wisely. (We will be touching this topic in detail later)

Minimum amount to invest in stocks

In average, minimum amount required to start up an online trading account ranged from $1,000 (normally for discount-brokerage firm) to $50,000 (for full service brokerage firm).

How to start a trading account? What are the paper work needed for new registration?

Before you get started with new registration, you may require to submit:-

  • Identification verification (eg. Identity card, or driving license)
  • Utility bill (Normally water or electrical bill. Most brokerage firm DO NOT accept mobile phone bill)
  • Tax declaimer form
  • New account registration form(s)

Online Stock Trading Comparison and Online Trading Platform Reviews

There are two major brokerage service found online, discount brokerage and full service brokerage. Generally, a discount-brokerage firm will charge for lower commission as compare to full service brokerage firm. Differentiated by analysis reports service provided by full service brokerage firm. (will elaborate in detail later)

What are the best online stock trading company around the world?

The detail of such reviews will be discuss in LATER (in the next phase of DETAIL keys value investing lessons).

As a value investor, I would select the low-frequency trading platform mainly due to few reasons. The very first reason is that my objective of buying a share is to hold it FOREVER. Never under-estimate the commission charges of your broker. Study and plan wisely, learn how to minimize trading expenses before you decide which broker suits your investment strategy the most.

Investment Income Tax System in USACapital gain tax table

We have to know exactly about the tax structure or tax system in each of the country we intended to invest in. Here, we will touch a little more about the tax system in USA.

Income from investment is taxable and varies from duration of holding period. (Capital-gain tax).

Short-term capital gains are taxed at the investor's ordinary income tax rate and are defined as investments held for a year or less before being sold. Long-term capital gains, which are gains on dispositions of assets held for more than one year, are taxed at a lower rate than short-term gains. In 2013, this rate was reduced to 15%, and to 5% for individuals in the lowest two income tax brackets.

Foreign investor has the privilege of tax exemption if any long term investment holding period that was more than 12-months.

Conclusion

"A little knowledge is dangerous!"

Last but not least, I would like to congratulates everyone of you that dedicated yourself for making it so far.

However, I need to be frank...that THIS IS JUST A BEGINNING...please be prepared to enter the next stage of becoming a most successful value investor in history...in great detail.

Always "stand on the shoulder of GIANTS!" (learn the secrets of successful value investors of all time).

I can understand that learning all this information for the first time can be pretty challenging, especially if you are a beginner. If you are feeling overwhelmed of even slightly confused over some of the concepts taught, don't worry! It's normal. If you ever need any feedback or support regarding with the investing know-how and brainstorming discussion, I would be more than happy to connect. Simply leave your comments below and make sure you visit my site regularly as I am always updating it with lots of “A-ha” ideas and information that I come across and I guaranteed that you will find interesting.

Posted by Mike.


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